(EnergyAsia, April 4 2011, Monday) — CNOOC Limited, the listed arm of China’s largest offshore petroleum giant, China National Offshore Oil Corp, and France’s Total have each agreed to acquire from UK’s Tullow a one-third interest in three prospective onshore areas in Uganda.

Subject to closing terms and conditions and approvals from the Ugandan government, CNOOC said it will pay Tullow, the previous 100%-owner of Exploration Areas 1, 2 and 3A, US$1.467 billion in cash for its stake. Upon completion of the transactions, the three companies will each hold a one-third interest in the three areas in the Lake Albert Rift Basin whose operatorship will be determined by the Uganda government.

Tullow, which discovered the areas in 2006, says it hold more than one billion barrels of P-50 recoverable volume of oil.

CNOOC said it expects the basin-wide production rate to eventually exceed 200,000 b/d of oil.

Yang Hua, CNOOC’s CEO, said: “The transaction signifies another milestone for CNOOC Limited to grow its overseas business by entering into Lake Albert Rift Basin, one of the key frontier basins in East Africa. As one of the project operators, the company will apply its strong operational capability and work closely with our partners to accelerate the basin-wide development. I believe our investment will create considerable value for our shareholders, while contributing to Uganda’s economic growth and social welfare for local people.”

Li Fanrong, CNOOC’s President, said: “The project is expected to become one of the largest oil and gas developments onshore Africa in recent years. The transaction will help us establish our second major production province in Africa following Nigeria, and contribute to our long term growth as we proceed with intensive exploration and development programmes with our partners in the next three to five years.”

This was CNOOC’s second major announcement for an upstream investment in successive months, having agreed to pay US$570 million for a third share in an onshore area in the US in February.

Wholly owned subsidiary CNOOC International Limited acquired the stake in Chesapeake Energy Corporation’s 800,000 oil and natural gas leasehold acres in the Denver-Julesburg (DJ) and Powder River Basins in northeast Colorado and southeast Wyoming states.

CNOOC Limited has also agreed to fund 66.7% of Chesapeake’s share of drilling and completion costs up to $697 million, which the US firm expects to begin by end-2014.